Partly in frustration with getting outbid for Northeast Minneapolis properties, the Northeast Investment Cooperative (NEIC) has gone across Minneapolis’ borders for its next potential building to purchase.
In a letter to members, the NEIC Board announced signing a Letter of Intent to purchase the property at 1601 37th Ave. NE, current site of Dave’s Heating and Air Conditioning. “The 2,100 square-foot building is located on a stretch of Johnson Street NE that sees heavy local traffic, making it an ideal location for a wide variety of tenants,” they said.
Board member Colleen O’Connor Toberman told the Northeaster “The property is in a limited business district. Permitted uses (some requiring a conditional use permit) include retail, office, clinic, some restaurants, gallery, studio, etc. so we have options. We have an ever-growing list of folks who want to be NEIC tenants so we’re in the process of following up with those who might be a good fit for this building. As always, we want to lease to a locally-owned, community-minded business that serves the neighborhood well. Our level of financial investment in the building should allow us to offer a competitive and attainable rent for a small business.”
NEIC’s first project was near the northwest corner of Lowry and Central where Recovery Bike Shop, 2504 Central purchased their building right away, allowing the remaining 2506 Central space to be renovated for Fair State Brewing and Aki’s Bread Haus, which rent from NEIC.
The letter to members listed the terms and said the property appears to cash flow after rehab and making dividend payments to member/investors.
The letter stated, “We…, after lengthy debate, decided to move forward with submitting an offer for several reasons: The property is literally right across the street from Northeast Minneapolis. The low purchase price will allow NEIC to pursue another project relatively quickly while continuing to build our real estate portfolio. NEIC’s ideal market is highly competitive and the commercial property for sale is scarce.”
During a 90-day due diligence period allowed in the purchase agreement, the NEIC board plans question-answer sessions for members and other interested parties. They will be held July 27 at East Side Neighborhood Services, 1700 2nd St. NE (Room B19) from 7-8 p.m. There will also be an info session on August 16 from 7-8 p.m. in the EFC community room.
There will also be question-answer time built into the following regularly scheduled meetings to be held in the basement meeting room B19 of East Side Neighborhood Services, 1700 2nd Street NE:
• Monday, August 1 from 7-7:45 pm (NEIC Property and Tenant Committee)
• Monday, August 22 from 7-7:45 pm (NEIC Board).
Anyone unable to attend an FAQ hour is invited to send questions or concerns via e-mail to the Board at board@neic.coop.
At the NEIC annual meeting held April 19, 2016, members were told that C and D shares would be offered when the next building purchase is in hand. C and D shares are non-voting additional investments members make for specific reasons such as the buildout that would be needed on the new building.
Such financing other fundraising will begin during the due diligence period, too, along with talking to members, the general community, and Columbia Heights city staff.
NEIC has a $25,000 McKnight Foundation grant to help fund the soft costs of property development including legal, architectural, and inspections costs.
Typical real estate due diligence involves property inspections, analysis for potential environmental issues, working with potential tenants to make sure they are viable and the property suitable for their use, obtaining any city permit approvals, and so on.
The current occupant, Dave’s Heating and Air Conditioning, will be moving out; business owner Dave Roberts sold the building to its current owner a while back, and we were not able to reach him for comment.
The NEIC Board consists of: Chris Bubser, Amy Fields, Jackie Francis, Brandon Hallstrand, Stephen Norton, Loren Schirber, Colleen O’Connor Toberman, Leslie Watson, Alex Vasatka, and Jill Wilhelmi. Website: www.neic.coop.
Note: Publisher Margo Ashmore is an owner/investor of NEIC.